ALTERNATIVE INVESTMENT management LIABILITY Insurance Policy
Insuring Agreement A: INVESTMENT ADVISER PROFESSIONAL LIABILITY
I.INSURING AGREEMENT
If Insuring Agreement A is designated as an “Included” Insuring Agreement as set forth in Item 3.(B) in the Declarations, the Insurer shall pay in connection with a Wrongful Act(s)which takes place before or during the Policy Period all Loss on behalf of any Insured arising from any Claim(s) for a Wrongful Act(s) first made against such Insured during the Policy Period or Extended Reporting Period, if applicable, and reported in writing to the Insurer as soon as practicable after any Executive Officer(s)of an Entity Insured first becomes aware of such Claim(s), but in no event later than ninety (90) days after the expiration of the Policy Period or Extended Reporting Period, if applicable.
II.DEFINITIONS
The following definitions are applicable to the coverage afforded under Insuring Agreement A:
A. Insured means:
1.Insured Individual(s);
2.Investment Adviser;
3.New Investment Adviser; and
4.Any entity scheduled by written endorsement to this Policy as an Insured under Insuring Agreement A.
B.InsuredIndividual(s) means any one or more natural persons who are past, present or future duly elected or appointed director(s), officer(s), Manager(s) or employee(s) of anyInsured or Entity Insured or his or her functional equivalent if serving in such a position outside the United States.
C.Investment Adviser means any Insuredwhich, as of the effective date of this Policy is: (1) registered under the Investment Advisers Act of 1940, as amended; or (2) is scheduled by written endorsement to this Policy as an InvestmentAdviser. Subject to the conditions set forth in Section II. Definitions E. in this Insuring Agreement A, Investment Adviser also means a New Investment Adviser.
D.Investment Advisory Services means:
1.the provision of financial, economic or investment advice or the performing of investment management services to others by an Investment Adviserpursuant to a written contract;
2. the provision of computer or Internet services or administrative services, or the writing or preparing of publications by any Insured, provided that such services are performed in connection with the Investment Adviser’sservices as described in D.1. of this subsection; and
3. the selection, oversight or direction by any Insured of any Outside Service Provider performing Investment Advisory Services on behalf of the Investment Adviser.
E.New Investment Adviser means any entity that provides Investment Advisory Serviceswhich the Policyholder:
1.Creates or acquires;
2.Merges with and the Policyholder is the surviving entity;
3.Acquires all or substantially all of the assets of such entity; or
- Assumes voting rights representing the present right to vote for election or to appoint more than fifty (50) percent of the directors or trustees of such entity;
after the effective date of this Policy.
Notwithstanding the above:
(a)If, at the time of completion of such creation, acquisition, merger or assumption, the total assets under management of such NewInvestmentAdviser do not exceed twenty-five (25) percent of the total assets under management of the Policyholder, this Policy shall provide insurance for such NewInvestmentAdviser and any InsuredIndividual(s)of such NewInvestmentAdviser until the end of the Policy Period.
(b)If, at the time of completion of such creation, acquisition, merger or assumption, the total assets under management of such New Investment Adviser exceed twenty-five (25) percent of the total assets under management of the Policyholder, this Policy shall provide insurance for such New Investment Adviser and any InsuredIndividual(s)of such New Investment Adviser for a period of ninety (90) days after the effective date of such creation, merger, acquisition or assumption or until the end of the PolicyPeriod, whichever is sooner. At its sole option and upon submission of any and all information it may require, the Insurer may, upon payment of any additional premium or modification of the provisions of this Policy that may be warranted, extend the insurance otherwise afforded under this Insuring Agreement.
Notwithstanding the above, the Policyholder shall provide notice to the Insurer within ninety (90) days after the termination or expiration of the Policy Period of all theNew Investment Advisers created, sponsored or acquired during the Policy Period.
F.Wrongful Act(s) means any error, misstatement, misleading statement, act, omission, neglect, or breach of fiduciary or other duty actually or allegedly committed or attempted by anInsured solely in the performance of Investment Advisory Services.
III.EXCLUSIONS
The following exclusions are applicable to the coverage afforded under Insuring Agreement A:
A.The Insurer shall not be liable for Loss arising from any Claim(s) made against any Insured:
1.For the inability to make any payment by any bank or banking firm, broker or dealer in securities or commodities, or any other person or entity or the inability of any such entity or person to settle or effect any transaction of any kind; provided however, this exclusion shall not apply to Claim(s) for WrongfulAct(s) in connection with the Insured’s Investment Advisory Servicesthat relate to the selection of such entities by the Insured to provide services for the Insured;
2.For an Insured's liability under any contract or agreement, regardless of whether such liability is direct or assumed; provided that this exclusion shall not apply to:
(a)Any Claim(s) against an Insured by a client or customer of the Insured, if and solely to the extent that the Claim(s) alleges a breach of contractual obligations in the rendering of or failure to render Investment Advisory Services; or
(b)To liability which would attach to an Insured even in the absence of a contract or agreement;
3.Based upon, arising from or attributable to any actual or alleged investment in securities issued by the Parent Company, any Subsidiary or any affiliate thereof; provided that this Exclusion shall not apply to an investment in securities issued by:
(a)a registered investment company, as that term is defined in the Investment Company Act of 1940, as amended, which is sponsored by the Parent Company, any Subsidiary or any affiliate thereof; or
(b)a Private Fund; or
4.For any Wrongful Act(s) by any New Investment Adviser or by any director(s), officer(s), Manager(s) or employee(s) of any New Investment Adviser, or his or her functional equivalent if serving in such a position outside the United States, where such Wrongful Act(s) occurred in whole or in part before the New Investment Adviser was created, acquired or merged with the Policyholder or became a Subsidiary of the Policyholder, or for any Wrongful Act(s) occurring on or after such date which, together with any Wrongful Act(s) occurring before such date, constitute Interrelated Wrongful Acts.
B.Modifications to the Exclusions of the General Terms and Conditions Section
The exclusions set forth in Section II.A.5. of the General Terms and Conditions shall not apply to any Claim(s) against an Entity Insured under this Insuring Agreement A brought by or on behalf of an entity that qualifies as a Private Fundif in the opinion of independent legal counsel selected by the Policyholder(selection of such counsel being subject to approval by the Insurer, which approval shall not be unreasonably withheld) and at the expense of the Policyholder (and not the Insurer), the failure to make such Claim(s) would result in liability upon the directors, officers, partners or trustees of such Private Fund for failure to assert such Claim(s).
IV.CHANGES IN EXPOSURE
If, during the Policy Period, any Investment Adviser changes its name but does not make any material changes or modifications to its ownership or operations, this Policy shall continue to provide insurance to such Insured for the remainder of the Policy Period. The Policyholder shall provide notice to the Insurer within ninety (90) days after the termination or expiration of the Policy Period of all Investment Advisers that have changed names during the Policy Period.
If, during the Policy Period, any Investment Adviser other than the Parent Company ceases operations or ceases to be more than fifty (50) percent owned by the Policyholder (either no longer owning more than fifty (50) percent of the issued and outstanding voting stock or no longer having the right to elect or appoint more than fifty (50) percent of the directors or trustees), coverage with respect to such Investment Adviser and its Insured Individual(s) shall continue until the termination of the Policy Period, but only with respect to a Wrongful Act(s) occurring prior to the date such Investment Adviser ceases operations or ceases to be more than fifty (50) percent owned by the Policyholder. The Parent Company shall provide notice to the Insurer within ninety (90) days after the termination or expiration of the Policy Period of all Investment Advisers that have ceased operations or ceased to be more than fifty (50) percent owned by the Policyholder. If the Parent Company is acquired as described in General Terms and Conditions Section VII.A.2., neither the Investment Adviser nor its Insured Individual(s) shall have the right to coverage provided pursuant to this paragraph.
AIM 3002 (Ed. 0907)Page 1 of 3Printed in U.S.A.